So at long last I'm back. It's been a while and frankly I've probably missed the rather cathardic outlet of this blog more than I knew. For the last 4 months or so I've been pretty much totally focused on the business and this has yielded two rather significant obstacles to anyone who seeks to keep an account such as this website. Firstly, I've been extremely busy. Running a restaurant in it's first year is not only about all of your hours being taken up by work but also living the the constant knowledge that you never accomplish more than 20% of your work in a given day and that tomorrow will add more and more. There is a certain guilt that accompanies this, once known, that drives you to progressively eliminate your hobbies (obviously not good for mental health). The second obstacle to my continued updates to this site is a little more cynical. Frankly, we've begun to get numb to things. Circumstances that used to invoke outrage in me began to invoke only sputtering laughter and then nothing. I took a nice vacation and I'm back in laughter mode which is where I intend to stay. The outrage is still there but hidden beneath a veil of abysmally low expectations that is a staple of doing business in Moldova.

So on that dismal note I will launch into a topic that I think is going to paint a picture of doing business here (and as such exhibits an amount of frustration) but with a focus on how things could be. Specifically how much opportunity there is here for anyone who wants to work hard and try. When I originally began to draft this entry a few months ago I titled it "Working with suppliers (or: Coca Cola we expected better of you)." Hilariously (in retrospect) I held off because I didn't want to call Coke out by name. I have since lost that inhibition (and you shall see why).

Note: for any of you in Moldova you likely realize that we have been open for just over a month (if you didn't know that come visit us!! smokehouse.md for directions).

Smokehouse opened for business on Monday June 29th 2015. As you might imagine the trials of a new business have completely consumed my time (and still do) which is why this is the first time I'm getting a chance to make an update. The reality is that this date was just 12 days away from the 1 year anniversary of signing the lease to our Smokehouse location. It feels like it's time for me to write a bit about our journey.

Have you ever had one of those moments when someone says something that you have long known to be true but they way they say it makes the knowing it both stronger and clearer in an instant? This happens to me from time to time when a single turn of phrase can open up an idea more powerfully than an entire novel. This was the case recently when I was talking to a German friend with lots of experience in the Moldovan financial system who said the following.

"in America or Germany the fiscal authorities are primarily concerned with uncovering fraud. In Moldova they don't look for fraud, they look for errors."

Hiring someone in Moldova is so hilariously convoluted and difficult that we have actually had to hire a professional HR manager as an employee of our company simply in order to file the paperwork to employee the company's founders (technically we also have an accountant and 1 employee but this would literally be just as hard hiring only ourselves). This woman has been working on site now for 2+ weeks and we are still not through the daily stacks of paperwork. Keep in mind we are 6 people (including the HR manager who is now also tasked with figuring out how to hire herself). This is all the subject of a future post I'll be writing but as a primer, I wanted to introduce you all to the world of Moldovan employment bureaucracy in the context of getting a job in the food service industry.

While our team's collective western food service expertise is encompassed in Matt's 2 weeks at Taco Bell in high school, I have enough friends who have waited tables to know a few things. Namely, it's a hard job, but it's not necessarily a hard job to get. You walk into a restaurant, ask about openings, apply, and get in dependent on whether or not they see you as a fit.

no experience? that's fine! no, no we don't want to hear about any "record" - just sign on the line!

I'm not trying to oversimplify things but basically if you get the job you show up to work, they train you and you start. Hopefully by the end of the cycle payroll has you entered in and you get your check. Done and done. This is not the process in Moldova. If you want a job in food service (waiter, bartender, cook, whatever) in Moldova you need to know that...

So here's a new type of entry for us to have on OSE. Today I'd like to share with you companies that we've encountered in the course of doing business here that have stood out as great examples of how to conduct a quality business in Moldova. It's important for me to note that this list is only compiled from our experiences here so a) we have no doubt missed lots of great companies (post them in the comments below with why they're awesome and we'll try and include it in a future post!) and b) we may have judged a company as awesome from our limited experience where someone else had a different experience there. In either case take to the comments to let us know what you think! Here are the picks. They aren't ordered so don't get too hung up on the numbers except as an organizational convenience :)

This last week I started to write my first serious post dedicated to corruption in Moldova. While I've touched on the subject a bit in my short post about The DMV or the epic saga that was our visa approval process but nothing dedicated to corruption. As you might have noticed from the title of this post this is not such a post. I realized that even starting that conversation was so daunting without certain background elements explained that it was totally unmanageable in scope. I'll try again soon but in the meantime I decided it was time to share a glimpse into accounting in Moldova - by far the most batshit insane and corrupt part of doing business here bar none.

Let me preface this article by saying that it is just a first effort to scratch the surface of this madness. By no means do I have even a rudimentary grasp on the workings of the accounting and fiscal systems in Moldova and attempts I've made to understand them have come up very short. As a team we've decided that someone needs to start taking night classes on accounting here just to get some idea of what's going on (and we have a full time accountant hired now). So with that said here's a bit about what I do know right now. Pardon me if I made bad assumptions as to intentions or root causes behind these things. After dealing with this for a day it is easy to assume that the system was entirely crafted by unhinged lunatics on a bender and to forget that there are real people trying to address real problems in the government here. That said, as you will see, they are failing spectacularly.

In life there are the problems that you see coming a mile off and those that just pop up out of no where. As we'll see from this short post culture has a whole lot to do with what you do and don't see coming. This is a condensed version of the tale of our final search and closing on a location for Smokehouse.

quick note: don't forget our site has a comments function. With something as complex as banking and loans / many of the topics we cover there is a very good chance that you know more about some element of it than we do. Share your thoughts!! Comments are at the bottom.

Introduction - funding a startup

So here we have an interesting post detailing the last month and a half we've spent trying to get to a "happy spot" regarding startup capital. There are many ways to fund a startup (as this nice article explains) but for something brick and mortar like a BBQ restaurant many options aren't as available as they would be if, say we were starting a scaleable tech company. With that reality the most common way for people in the US to start a small business is by "bootstrapping" it with their own capital, either in the form of cash, a 2nd mortgage, personal credit or help from friends and family as loans or in exchange for equity. In our case we are a very "bootstrapped" company. We have our own assets on the table and have approached lots of friends and family for investment. All told this just isn't enough so we started looking to other options. This is when we began to investigate the possibility of a Moldovan bank loan.

This short post is a bit of a departure in that it does not directly pertain to business in Moldova. That said it a) discusses a proces that any expat needs to go through to stay here (aka - registering with the DMV if you have a car) and b) exemplifies a prevelant mindset here reguarding bribes or "to do something with money"

So... anyone who has ever gone to the DMV (the "Department of Motor Vehicals" for non-drivers) in the US is aware of what a "fun" process this is. I can't speak to any other countries in the world but I suspect that this is a universally hated institution. I once called the DMV helpline in Virginia and after 30 minutes on hold was told that "there was a higher than normal call volume" and I should call back on Wendsday. It was Thursday. So with the background of having once been put on hold for a week in the US here is the tale of the Moldovan DMV - МРЭО.

After finally achieving my visa to live and work in Moldova it was time to re-register my car. I drive a 1986 Lada Жигули named Надя (Nadia - "hope" in Russian). Nadia and I have been on many adventures together but have had to take a prolonged break while waiting for my visa as her tags expired. So it was with spring in my step that I grabbed the tags off the car and took a marshrutka (mini-bus) out to where google told me the DMV was. It was my figuring that I would have to pay some fees and do some paperwork but that this would be fairly straight forward. In Virginia you do this by mail. Sadly (but predictably) in Moldova things are more complicated. I was turned away from the DMV because they needed to see my car as well. I asked them "am I allowed to drive here with expired plates?" This was met by a blank stare which I took to mean "yes sir we will personally vouch for you in the event of trouble and go so far as to expound upon your great personal character should the police have doubts." I drove in the next day.

Read Me First: I wrote this originally while this process was ongoing so I imagine a fair amount of frustration and anger comes through. I've edited the post to reflect the fact that we did eventually get our visas but I have tried to keep the tone the same. This was an incredibly terrible process and I have no desire to sugar coat it just because we got through it. I've had to put a little distance between the events and my posting to even look it over because the whole thing is mostly a mess of bad memories for me. So, without further ado please enjoy...

Well folks you're in for a doozy with this one. I apologize in advance. If you're the kind of person who doesn't want to see things about Moldova that make you sad, depressed or enraged I recommend stopping now.

That picture you see there is my whiteboard's countdown. It was a countdown from the moment my visa got rejected to the day I needed to get myself out of this fine country I've called home for over 2 years. It reflects the fact that for almost a month our living room became a war room dedicated not to our business but to fighting a corrupt and confused visa process just in order to stay in the country. At the end of this process our appeal was accepted and we managed to get visas. Before it did though that whiteboard counter hit zero and went negative. Read on to follow the tale...

So here's a topic that will look very familiar to anyone who's lived in the post-Soviet space but seem totally nuts to everyone else. Stamps - what are they for? Well in Moldova the answer is "literally everything." I first came in contact with this when I went to Kazakhstan as an English teacher and my packing list included "stamps for grading papers." My first thought was "I thought I was going to be teaching high school - why do I need smiley face stamps?!" The reasoning is because no matter how silly looking the stamp they make things "look official."

To understand this you need a little background on how things become "official" here vs. in the states. In America your signature is your bond. Furthermore your word can be your bond in contract law if it is deemed a verbal contract. I am not a lawyer but the gist is that in the US agreements can range from silly-informal to super formal. In Moldova they are always super formal. In theory this is to "control" the process ("control" being a translation from Russian for something like "oversight on steroids") and to prevent fraud and forgery. In practice this is a system of red tape unrivaled by even the darkest fears of government fearing anarchists. It is literally like buying shotguns to kill flies.

not only is this a real product but you too can be killing flies with a shotgun for the low price of $39.95. I fucking love America.

This is Part 2 of the process of introduing a US based LLC as a parent company of a Moldovan SRL. Find Part 1 here.

Note: this post is mostly a wordy, if humorous, take on banking and wire transfers in Moldova. If you would like to jump to the recommendations section for Parts 1 & 2 of this post do so here.

**Update Nov 15: we just finalized all of the papers so this process is over. Once we got through the lower level people to the department director things got much easier. This is in spite of the fact that they royally messed up our paperwork. The director fixed it all himself and was not only professional but extremely pleasant to work with. It's always a wonder when you find someone in the government who really wants to help and make your day easier. Today, at the end of this mess, I have a lot of respect for the State Registration Chamber. Also we discovered that we can in fact have multiple "Administrators" of the company. Post coming soon...

Note 1: This post is an update to our first post about organizing a company in Moldova. While that post was pretty general and explained our initial reasoning this one will attempt to explain the results of that reasoning over the last few months and a few preliminary recommendations for other entrepreneurs (ok, this got long. Conclusions Recommendations will be in Part 2 [COMING SOON]). We will be writing a further update on this topic later on with more solid recommendations. (small update below)

Note 2: This post is covering quite a lot of experience had over a long period of time. The topic is dense and often technical. Please comment if things are unclear and I will add more information. Also, as usual, please feel free to tell us how stupid we are. Everyone can learn from that.

Jump to... (note to use these section links open up the full version of the post by clicking the title or on "Continue Reading" below)

I'll begin where the last post ended which was with a discussion of the process that we decided to embark upon. That was to organize the companies basically as follows:

I'll let you all guess which silhouette represents which manager...

So to describe what you're seeing there we founded a Moldovan SRL called "Smoke House SLR" (they refused to believe it was one word and we didn't fight it). Additionally we founded an American LLC called "The Moldova Company LLC" in Virginia. The purpose of the LLC, as described briefly in the previous post, is to escape from some of the more challenging bureaucratic differences between a Moldovan SRL and an American LLC. These all...

While I'm not sure who wrote the quote I've used as the title for this entry I'm sure we've all seen it circulate around the internet. In this process of starting a restaurant in Chisinau we have run into roadblocks in the strangest places and more ambiguity than I can quantify. If one were to identify a single thread of anger, disappointment and exasperation that pervades my postings (and much of my work right now) it is ambiguity. In most countries there is an easily understandable lines between what is and what isn't permitted. Furthermore, it is pretty easy to figure out where you will encounter difficulties. If you were opening a restaurant in NYC for instance there are numerous resources that could help you find the information on the startup process you need. In Moldova this is not the case. If I were to sum things up it would be that...

Update 29/9/14: it seems that Americans (and possibly other countries but I have no idea which) are allowed to apply for 5 year visas instead of just 1. This was conveyed to us by one of the branches of government tasked with approving our visas. We are trying to alter the documents post-submission but are unsure if it will succeed. Stay tuned.

So if you're not a Moldovan and you're going to try and start a business in Moldova you will need a visa. This is an interesting process and by "interesting" I mean basically horrible. Firstly, here are the top-level requirements:

If you are from a country that has visa-free entry to the Republic of Moldova (like America and Most of Europe - a list is provided here but I have no idea if it's up to date)

You must apply for your visa while you still have 30 days left on your visa-free stay

They will evaluate your visa for 30 days. After that you go back to the office and they tell you yes / no

If you require a visa to enter the Republic of Moldova - good luck. I encountered a lot of the paperwork for this process and while it seemed straightforward it's a fair bet that it's anything but. Anyhow, I have no experience with it (if you do please comment below)

If you're the type of person who scans to the end I'll save you the trouble. The answer to the title question is "No One Knows"...or perhaps "I won't ever tell!" (which is also the name of a rather unfortunate song from Fat Joe).

Ok, what are we actually talking about here? Let's start at the beginning. Ever business needs services. Some of these are easier to farm out than to do internally - often legal and accounting fall into this category. This post is about our experience trying to hire an accountant. This process has turned out to be rather difficult in Moldova. Partly this is because most accountants are uninterested in working with a restaurant due to the high numbers of transactions but it is also because of meetings like the following.

So, we go to meet the senior accountant at a small firm. She came highly recommended to us by a friend who's parent's company contracts with her and she speaks English Russian and Romanian well. Seems perfect. When we arrive we are ushered into a room with her and her firm's Director. It is possible I have mentioned the status of directors in Moldova in the past. In short their importance in an enterprise is only surpassed by their self importance.

Ok team, this post shall be short and sweet. The title pretty much lets you know what it's about and the lead in pic gives away the end. So, Mobias Bank eh? why?

The answer turns out to be more that there wasn't anything significant to chase us away from it. In order to get there let me list off the main banking options in Moldova as well as their affiliations.

Bank

International Affiliation

Notes

Moldova Agroindbank

N/A

This is the bank used by Peace Corps which speaks rather highly to it.

BCR Bank

Erste Group (Germany)

Mobias Bank

Groupe Societe Generale (France)

Victoria Bank

N/A

Owned by and closely affiliated with Vladimir Plahotniuc, sometimes called "Moldova's one and only oligarch." Multiple people have referred to Victoria Bank as the safest bank in the country because of its association with Mr. Plahotniuc.

I'd like to say that we did exhaustive research here but we pretty much just gathered the above information and decided that we wanted our money in an internationally backed bank which leaving Mobias and BCR. Choosing between them pretty much came down to convenience of location.